This is a minor paper that I submitted for my MBA unit ‘Fundamentals of Leadership’ back in late 2014. We were required to write about a ‘sustaining corporation’. I chose Australian information technology success story Atlassian, a company that has recently listed on the New York Stock Exchange (the paper was written well before this).
If anyone is reading at Atlassian – and I know that you actively monitor social media for brand mentions – then I’d like a job!
I have long been an admirer of Australian ‘startup’ software company, Atlassian, the brainchild of two University of New South Wales colleagues, Scott Farquhar and Mike Cannon-Brookes.
Apart from offering brilliant enterprise software and being commercially successful, Atlassian has implemented ‘human resource and business strategies that that support rather than diminish global ecology and human/social capabilities’ (Benn et al 2006, p.156)
On the integrated phase model proposed by Benn, Dunphy and Griffiths (Benn et al 2006), Atlassian is a ‘sustaining corporation’ – it is a company that ‘deliver[s] sustained high performance, provide[s] for just and equitable conditions in the workplace, contribute[s] to social equity, and assist[s] in renewing the biosphere’ (Benn et al 2006, p.156).
What is ‘sustainability’?
Sustainability, in the context of an organisation, is its capacity to continue to operate, to remain productive and viable. Historically, a commercial organisation’s success was measured in purely economic terms – a company’s financial ‘bottom line’, its profit, was indicative of its ability to sustain itself.
In contemporary times, however, the concept of sustainability has broadened to incorporate other ‘pillars’ that contribute to an organisation’s longevity, in a world that demands much more from corporations in non-economic terms – namely social and environmental (or ecological) pillars.
In response to this trend, many organisations have adopted a ‘triple bottom line’ (1) accounting approach to measure performance across each of these three spheres(2). The spheres are often succinctly referred to as ‘people, planet and profits’ (3):
- People. This refers to an organisation’s human practices in relation to its personnel (internal) and the community and stakeholder sphere in which it operates (external), and recognises the reciprocal benefit that organisations achieve through the well-being of people.
- Planet. This refers to an organisation’s environmental practices, its intent to protect the natural environment, and to minimise its ecological footprint through initiatives such as energy conservation and waste reduction.
- Profits. This refers to an organisation’s economic performance, its ability to generate profits (internal) and its ability to contribute more broadly to the economic environment in which it operates (external).
Ultimately, sustainability is about striking a balance between the three pillars. To demonstrate the importance of the ‘planet’ pillar economist Herman Daly asked, ‘what use is a sawmill without a forest?’ (Daly & Cobb 1989) – equally, a sawmill is not sustainable if it has no workers, no customers or fails to generate economic benefits.
Atlassian is a sustaining corporation. Founded in Sydney in 2002 from humble beginnings (it was initially financed by a credit card with a $10,000 credit limit), Atlassian develops enterprise software products for software developers and project managers. It is best known for its issue tracking application, JIRA, and its team wiki collaboration product, Confluence, which are used globally by the likes of Facebook, NASA, eBay, CSIRO, Audi, Cochlear and Twitter (Atlassian website).
As at September 2014, the company had over 1,140 employees, offices in 12 cities across the globe, over 40,000 customers, many millions of users, and a valuation of more than $1 billion that will likely see it undertake a public listing in the United States in the future (Australian Financial Review, 12 Sep 2014).
Founders Farquhar and Cannon-Brookes, now both aged 34, were jointly named Ernst and Young’s Enterpreneur of the Year in 2006 (Atlassian website) and they have been among Australia’s richest people for the past seven years. Poster boys for the Australian ‘tech startup’ sector, Farquhar and Cannon-Brookes are living proof that corporate success in Australia isn’t necessarily confined to traditional sectors such as resources and manufacturing.
Leadership and Atlassian’s Values
Atlassian is the organisational embodiment of its two founders. Farquhar and Cannon-Brookes are casual, easy-going and outwardly unspectacular. Like the vast majority of software developers that form the nucleus of Atlassian, they are ‘geeks’ at heart and are more comfortable participating in an office poker tournament than negotiating with investment bankers. They are not ‘big noters’ and don’t seek attention externally (they have been dubbed ‘reluctant industry statesmen’ (Business Insider, 7 Feb 2014)), but remain entirely transparent and accessible to their staff at all times. This understated, unassuming personality permeates throughout Atlassian and has contributed significantly to its commercial success.
Perhaps the best way to understand Farquhar, Cannon-Brookes and the ‘DNA’ of Atlassian is to consider the very unique set of five values that have guided the organisation since its founding (Atlassian website):
- Open Company, No Bullshit. Atlassian embraces transparency wherever at all practical, and sometimes where impractical. All information, both internal and external, is public by default. We are not afraid of being honest with ourselves, our staff and our customers.
- Build with Heart and Balance. Everyday we try to build products that are useful and that people lust after. Building with heart means really caring about what we’re making and doing – it’s a mission , not just a job. When we build with balance, we take into account how initiatives and decisions will affect our colleagues, customers and stakeholders.
- Don’t Fuck the Customer(4). When we make internal decisions, we ask ourselves ‘how will this affect our customers?’ If the answer is that it would ‘screw’ them, or make life more difficult, then we need to find a better way. We want the customer to respect us in the morning.
- Play, as a Team. We want all Atlassians to feel like they work with Atlassian, not for Atlassian. We think it’s important to have fun with your workmates while working and contributing to the Atlassian team.
- Be the Change you Seek. We think Gandhi had it pretty right when he said “We need to be the change we wish to see in the world”. At Atlassian, we encourage everyone to create positive change – we’re constantly looking for ways to improve our company, our products and our environment.
These values are indicative of Atlassian’s attitudes towards sustainability – it is entirely transparent with its employees and other stakeholders; it is customer-centric; it recognises the value of its employees and the importance of team; and it constantly seeks new ways to improve itself and its environment. Interestingly, there is no reference to money or economic performance in these values.
Pillar #1: People
Atlassian prides itself on its ‘reputation to attract and it keep the prized human resources necessary for long term development’ (Benn et al 2006, p.158). It hires selectively, it works extremely hard to retain its staff and reduce employee turnover, and it strives to foster a high-performing environment. To this end, the company was named the Best Place to Work in Australia in September 2014 by BRW magazine (BRW, 11 Sep 2014)
It is no surprise that graduate positions at the company are in high demand when one considers the employee perks on offer (Atlassian website):
- Five days of paid leave per year to support a charity of choice
- A company-paid holiday prior to commencing employment
- Free life insurance, in-office yoga, flu vaccinations, bike amenities, health fairs and paid sick time
- Access to study programs, training and development
- Ability to dedicate one day in every five to pet projects
- Aeron office chairs, lounge areas, Xbox, lunchtime sports, billiards and poker nights
- Internal ‘Kudos’ recognition program that rewards recipients with gift certificates
- Free $3,000 paid trip after five years of service
- Competitive salaries, $10K employee referral bonus, free salary continuation insurance and relocation support
- Fully stocked kitchen with breakfast, snacks, beer on tap and energy drinks
Another unique perk of working at Atlassian is ShipIt Days. Every quarter, employees are given the opportunity to work independently on a project of their choosing and to deliver it within a 24 hour timeframe. ShipIt Days enable staff to get creative, to tackle problems that might not otherwise be prioritised, and perhaps most importantly, to have fun. The developer of the most innovative solution receives the ‘winner’s booty’ – a ShipIt champion shirt, possession of the sought-after ShipIt Day trophy; and a ‘pirate’s booty of bragging rights and pride’ (Atlassian website).
On top of its internal practices, Atlassian’s focus on social equity extends beyond the company in the form of the Atlassian Foundation, which provides financial support to charities and community groups across the world. From the outset, Farquhar and Cannon-Brookes chose to set aside 1% of the equity of Atlassian to the Foundation, and that means it is currently worth around $35 million. Through the foundation, Atlassian has donated more than $3 million in cash (SmartCompany, 14 Apr 2014) and over 20,000 free software licences to not-for-profit organisations (5).
Atlassian’s most significant Foundation Project is its partnership with Room To Read, a non-profit organisation dedicated to improving literacy and gender equality in education in the developing world. Farquhar and Cannon-Brookes chose to support Room To Read because they believe that education is the key to breaking the cycle of poverty in developing countries. Together, Atlassian and Room To Read are giving over 170,000 children access to educational opportunities. Atlassian’s donations have resulted in the establishment of 238 libraries, the renovation or construction of 13 schools, the publishing of 13 local language children’s book titles, and support for 1,480 young women to complete secondary school. Atlassian is Room To Read’s largest funder in Cambodia where it has helped establish a Reading and Writing Instruction Program for children (TechCrunch, 4 Feb 2014).
Pillar #2: Planet
Atlassian is cognisant of its responsibilities in relation to the biosphere. The company belongs to the ‘cloud computing’ movement that is changing the way software and computing are delivered to end users – a change which is bringing significant environmental benefits. Rather than maintaining expensive on-premises computing infrastructure, organisations are increasingly accessing software and data ‘as a service’ via the internet (or cloud as it is termed). Atlassian’s products are delivered in this way via its Atlassian OnDemand program.
Not only does cloud delivery save money, it also provides an ecologically-friendly alternative to self-hosted infrastructure. In many corporate environments, utilisation rates of on-site, self-hosted servers is around 5-10%. With the cloud, computing power and software services are centralised in shared data centres where utilisation rates are routinely 60-70% of capacity (Accenture). This means that fewer machines and less air-conditioned data centres need to be employed to achieve equivalent capacity, resulting in a significant energy saving and reduced hard waste.
On top of that, Atlassian’s products themselves enable other organisations to achieve environmental efficiencies. Atlassian’s flagship software products JIRA and Confluence are online knowledge management tools, offering paperless solutions that remove the requirement for inefficient and ecologically-unsound hard copy printing and document storage.
Not content with simply offering environmentally-friendly computing, Atlassian also takes an active role in environmental conservation through localised volunteer work. For example, Atlassian’s Sydney office has partnered with Conservation Volunteers Australia and the National Parks and Wildlife Service to assist with bush regeneration and removal of exotic weeds on at least five occasions in the Sydney region (Atlassian Blog).
Pillar #3: Profits
No analysis of sustainability is complete without assessing the economic dimension. Commercial companies need to be financially viable if they are to be sustainable.
Atlassian is economically sustainable. On 13 September 2014, Atlassian announced that its sales had jumped by 44% in 2013-14 to $242 million, after enjoying a 35% jump the previous year. Recent media coverage of the company suggests that it may be seeking to list on the New York Stock Exchange in the near future (Australian Financial Review, 12 Sep 2014).
The modern definition of sustainability dictates that organisations have a responsibility to contribute not only to their own profits, but to the economic environment in which they operate. This view was challenged recently when Atlassian received Federal Court approval to move its corporate headquarters from Sydney to London, ostensibly to gain access to better tax arrangements (Business Insider, 5 Feb 2014). Atlassian expects UK shares to be more appealing to overseas investors because British regulations are more relaxed and better understood than those in Australia, but some in the technology industry see it as the company abandoning its roots (Business Insider, 7 Feb 2014).
Offsetting this opinion is the fact that Atlassian has provided extensive seed funding for other technology ventures in Australia. Since accepting venture capital themselves in 2010 from US company Accel Partners, the Atlassian co-founders have directed millions of dollars of their own money into local startups and incubators (Business Insider, 7 Feb 2014).
Atlassian is a true modern-day Australian success story and its success has been aided by its commitment to the three spheres of sustainability: people, planet and profits.
- First coined by John Elkington in Elkington, J (1997), Cannibals with Forks: the Triple Bottom Line of 21st Century Business
- Although it is important to note that implementing a Triple Bottom Line approach does not necessarily ensure that an organisation meets the criteria of a ‘sustaining corporation’ – Enron had TBL reporting and this didn’t prevent one of the world’s biggest corporate collapses. Benn et al 2006, p.163
- Also coined by Elkington at a conference in 1994. Wikipedia, http://en.wikipedia.org/wiki/Triple_bottom_line, accessed 25 September 2014
- Originally the word ‘fuck’ was expressly stated in Atlassian’s values, but has since been replaced with #@!& on its website and in printed media – apparently because the founders didn’t want employees’ children exposed to swearing when they visited the office, a problem which did not exist in the early years of the company.
- Atlassian’s Community User licenses program gives charitable organisations access to the same collaboration and project management tools used by Fortune 100 companies. An example is the International Potato Center, which uses Atlassian products to maintain its International Standard Organization (ISO) accreditation, ensuring that its genebank – which produces potato and sweet potato yields – doesn’t harbour pests or diseases that could wipe out crops or make them inedible for poor people in the developing world. Atlassian’s collaboration products have enabled International Potato Center to spend more time fighting global hunger and poverty than managing its accreditation processes.
- Accenture, ‘Cloud Computing and Sustainability’ White Paper, , accessed 25 Sep 2014
- Atlassian website, http://www.atlassian.com, accessed 25 Sep 2014
- Bailey, M and Smith, F, Atlassian named Australia’s best place to work, in BRW (11 Sep 2014), http://www.brw.com.au/p/leadership/atlassian_named_australia_best_place_p3XQE2CmYvpJbn2XejGnHJ, accessed 25 Sep 2014
- Benn, Dunphy and Griffiths (2006), Enabling Change for Corporate Sustainability: An Integrated Perspective in Australasian Journal of Environmental Management, Vol. 13
- Daly & Cobb (1989), For the Common Good Redirecting the Economy Toward Community, the Environment, and a Sustainable Future, Boston: Beacon Press
- Schetzer, A., ‘Atlassian sales leap 44% as revenue hits $242m’ in Australian Financial Review (12 Sep 2014), http://www.afr.com/p/technology/atlassian_sales_leap_as_revenue_7HYwjBcYr0BZzL0pDn6N4O, accessed 25 Sep 2014
- Shu, C. ‘Atlassian and Room to Read have raised $3m to help educate children in Developing Countries’ in TechCrunch (4 Feb 2014), http://techcrunch.com/2014/02/04/atlassian-roomtoread/, accessed 25 Sep 2014
- Tay, L. ‘ATLASSIAN – THE UNTOLD STORY: How Two Australian Young Guns Built A Company Headed For A Billion-Dollar IPO‘ in Business Insider (12 Feb 2014), http://www.businessinsider.com.au/atlassian-the-untold-story-how-two-australian-young-guns-built-a-company-headed-for-a-billion-dollar-ipo-2014-2, accessed 25 Sep 2014
- Tay, L. ‘Court Approves Atlassian’s Move To Britain’ in Business Insider (5 Feb 2014), http://www.businessinsider.com.au/court-approves-atlassians-move-to-britain-2014-2, accessed 25 Sep 2014
- Waters, C., ‘Atlassian pledges $35 million to charity: Founders call on entrepreneurs to do more’ in SmartCompany (14 April 2014), http://www.smartcompany.com.au/leadership/41525-atlassian-pledges-35-million-to-charity-founders-call-on-entrepreneurs-to-do-more.html, accessed 25 Sep 2014